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Congress Interrogates Wells Fargo CEO Over Fraud Practices

John Stumpf, CEO of Wells Fargo, went toe-to-toe to a panel of lawmakers as the House Financial Services Committee interrogated him regarding the bank’s dishonest practices.

Dem. Rep. Maxie Waters informed Stumpf that the company abused the public’s trust and was the biggest fraud case seen since the foreclosure crisis. She compared the issue with mass identity theft.

Stumpf, once again, apologized and said it would stop selling its cross-selling practices Oct. 1 rather than Jan. 1, 2017 as initially planned. He apologized the company violated their customers’ trust, and that the matter and behavior were brought to light sooner.

This did not placate members of Congress. Instead, Rep. Mick Mulvaney said the damage that was done to the market and industry surpasses the damage the company has done to itself.

Rep. Brad Sherman said Stumpf shouldn’t be the only one to shoulder the blame, suggesting other big bank heads should also be talking to Congress on whether or not they’ve participated in this kind of sales tactics. He said the American people deserve to know if the other banks are using these tactics for themselves.

The scandal has been financially damaging to Wells Fargo:

Over $20 billion has been wiped away from its market value.

California said it would not do any state business with Wells Fargo for a year.

The Labor Department said it would do an investigation to ensure no wage laws were violated by not paying overtime to sales reps who were forced to meet the quotas.

SEC is looking to see if investors were misled by the company.

The company is also facing a $7.2 billion lawsuit from former employees who said they were demoted or dismissed for their whistle-blowing.

Wells Fargo was also charged a $185 million record fine for opening fee-generating accounts without the authorization of its customers so reps would meet their high sales goals.

The company’s independent board of directors withdrew the $41 million in stock awards and halted his salary until the inquiry is over.